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Spot price S

Spot Price · Delta and Gamma

Option prices depend mainly on spot S, strike K, time T, volatility σ, risk-free rate r and dividend yield q. Supply and demand appear through traded prices and IV; a model price is not necessarily executable.

All else equal, a stock rising from $100 to $110 usually raises a plain call's value and lowers a put's. Delta is the local option-price response to a $1 spot change; Gamma measures how Delta changes with spot.

These sensitivities vary: one observed Delta cannot describe an entire large move. Net position Delta depends on each leg's side and quantity.

Adapted from the owner's material, with model limitations added.Reference: OIC option pricing factors · Theta learning resources. Fixed model inputs do not mean real market conditions stay fixed.

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